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  • The 5-day exponential moving average (EMA) has proved a tough nut to crack for three straight days.
  • The bearish pressure may ease above the 5-day EMA.
  • The 4-hour chart is reporting a bullish divergence of the relative strength index (RSI).
  • An above-forecast German CPI and Eurozone GDP could bode well for the common currency.

The 5-day EMA of 1.1397 is the level to beat for the EUR bulls. This is because the key EMA acted as a stiff resistance in the last three days.

The bearish pressure around the common currency will likely wane if the pair convincingly beats the 5-day EMA hurdle. That could happen today as the currency pair charted a bullish RSI divergence on the 4-hour chart yesterday.

Further, risk sentiment likely stabilized in Asia. The S&P 500 futures gained 0.5 percent and the Shanghai Composite erased early losses to trade in the positive territory. As a result, the European equities and the EUR could remain better bid during the day ahead.

Focus on Eurozone data releases

The preliminary third-quarter GDP, due at 10:00 GMT, is expected to show that growth rate remained unchanged at 0.4 percent quarter-on-quarter, but slowed to 1.8 percent year-on-year, from the previous quarter’s print of 2.1 percent.

Meanwhile, the preliminary German CPI for October is expected to print  at 0.1 percent month-on-month, following September’s 0.4 percent reading.

An above-forecast German CPI and upbeat Eurozone GDP could boost demand for the EUR. However, the prospects of a convincing move above the 5-day EMA would drop sharply if the Italy-German yield spread spikes, representing rising concerns about Italy’s budget.  

Technical Levels

EUR/USD

Overview:
       Last Price:  1.1382
       Daily change:  -1.5e+2  pips
       Daily change:  -1.29%
       Daily Open:  1.1531
Trends:
       Daily SMA20:  1.1571
       Daily SMA50:  1.1584
       Daily SMA100:  1.1623
       Daily SMA200:  1.1909
Levels:
       Daily High:  1.154
       Daily Low:  1.1531
       Weekly High:  1.1551
       Weekly Low:  1.1336
       Monthly High:  1.1816
       Monthly Low:  1.1526
       Daily Fibonacci 38.2%:  1.1496
       Daily Fibonacci 61.8%:  1.1472
       Daily Pivot Point S1:  1.1453
       Daily Pivot Point S2:  1.1392
       Daily Pivot Point S3:  1.1351
       Daily Pivot Point R1:  1.1555
       Daily Pivot Point R2:  1.1596
       Daily Pivot Point R3:  1.1657